(EB Insider/4.25.00) — In the burgeoning next-generation entertainment world and on the Internet in general, established real-world companies have a tough time mastering the dynamic new medium. Just look at Time Warner‘s Pathfinder, Entertaindom or Disney‘s Go.com. The desire to match a corporation’s diverse interests to an established revenue model usually results in an ambitious, comprehensive Web plan that is ultimately unclear, cloudy and suffers under its own weight. While this has been the plight of Hollywood up to the present, when independent film distributor Trimark announced last year that they would create their own Web presence under the banner of CinemaNow, many wondered whether indie film’s answer would suffer the same fate.

Hiring music video and CD-ROM production veteran Curt Marvis as CEO late last summer, the new company was given the opportunity to benefit from the Trimark legacy without being tied down by it. True to its own roots, CinemaNow is leveraging Trimark’s place in the indiefilm world as a way to differentiate itself from next-gen competitors. Just last week the company announced a new film festival sponsorship program in which they will provide encoding and streaming services to deliver selected festival films for exhibition over the Internet. So far, the Kansas City Filmmakers Jubilee, the Atlanta Film Festival and the Wine Country Film Festival have signed up and more are sure to follow. With all this activity, EB Insider decided it was time to talk with Marvis and find out what exactly CinemaNow is all about.

EB Insider: How did CinemaNow get started?

Curt Marvis: The idea for CinemaNow was spawned by a deal between Trimark Pictures and Broadcast.com over a year ago, back in February of ’99. Trimark decided that they were going to license on a non-exclusive basis 50 films to put up on Broadcast.com, which is now Yahoo! Broadcast Services, to test the waters. Mark Amin, who is the Chairman and Founder of Trimark (who is also the Mark in Trimark) and is also the Chairman of CinemaNow has been pretty adventurous throughout his career in terms of being ahead of the curve in media. When Mark Cuban originally approached him, he found it intriguing and decided he wanted to explore the concept.

So they did the deal and as part of it they got reports from Broadcast.com about viewership of the films. The first several months there were tens of thousands of people who were finding the movies, filling out a form and launching the movies. So it seemed to indicate that maybe there really was a business here. So Mark said, ‘maybe what we need to do is take a look at this whole thing seriously’. At that time, when they got together, the Trimark senior staff had the foresight that if they made it just Trimark.com, it’s kind of limiting and makes it feel as if it’s just Trimark Pictures.

One of the huge problems of this entire industry . . . whether it’s a plumbing company, an e-tailer, or an entertainment company is the cannibalization of the existing business. So what happens when you have a business built on revenue in traditional media . . . what starts to happen when you move that business to the Web? It’s a huge problem for everybody in every business. What happens to Blockbuster? What happens to Macy’s? So, Mark felt that the only way that the business could successfully grow and be fleet-of-foot and operate and expand would be to do it as a whole separate business. The contribution that Trimark would make would be the bootstrap funding to get the company off the ground, bring in the staff and offer up the Trimark library to CinemaNow as the launchpad for the company.

EBI: What is the company’s mission?

Marvis: When CinemaNow started it really meant, “I want my cinema now”, movies-on-demand. When I walked in the door [late last summer], my first order of business was, frankly, to figure out what the fuck this space is all about. That’s when I first saw AtomFilms and IFILM, I hadn’t even heard of them.

Because I have always had one foot in the music business, I had a lot of friends who were dealing with sites in the music space. I was looking at them and thought that that’s going to be extremely valuable three-five-seven years from now. And this library is going to increase in value every single day. And then when broadband gets bigger, our library is worth more money. But what are we going to do for the next two to three years?

We looked out at the landscape and [realized] that Trimark should be a community-based environment. Trimark shouldn’t just be an entity that supplies movies to us and then walks away. Trimark is a living, breathing production company that not only produces a dozen-plus movies every year and acquires a dozen-plus movies, but it’s always looking for new talent. It makes movies in the half million dollar range to three million budget range. So it makes low-budget films. And it has been a gateway for talent. So we decided that we should leverage that whole situation in order to be able to offer things to filmmakers.

The growth was so enormous and everyone was jumping into the game that we realized that we needed to accelerate. So we put up a teaser site at the end of December and we divided into two areas: Watch CinemaNow and Make CinemaNow. And even though we had nothing in Make CinemaNow, we threw the idea out there that we were going to create this virtual studio community over the course of 2000.

We believe that we have the best library of copyrighted independent theatrical films that are out on the Web right now. There will be other libraries that we’re finalizing deals on right now. We think that we have some of the coolest short film stuff from professional filmmakers or people who are going to move up the ladder. We also have some interesting film festival relationships that we’ll be announcing over the next month or two.

We just announced a deal that we’re doing with Homepage.com and Loudeye and first week of May we’re going to launch in Make CinemaNow an area that we call Expose Yourself, which is a homepage community for filmmakers, screenwriters, composers, actors, actresses and film crew people where they can put up for free anything (up to two hours worth of film material) to showcase their work.

EBI: So what is your revenue model?

Marvis: I’ll make the argument that we have the best model of any of the sites that are up there. First of all, we have advertising, which everybody has. There we have no distinct advantage over any of the other sites. That said, we have the opportunity to put dynamically generated streaming ads, like the other film sites do. And we believe because of the feature films that we’ve got on the site there are a lot of opportunities for sponsorship and other things. There is even the opportunity to do some early testing of embedding ads into the middle of the content, which you really can’t do on a short. You could, but in ten minutes to put 2 advertisements would be odd. So we may start to try a targeted television model is something that we’re seriously looking into.

In addition, we have (what again other sites would have) e-zines, targeted emails, etc. So, if you’re horror film aficionado, where I would argue that AtomFilms would be hard pressed to put a targeted e-zine out to horror film fans, we can absolutely do that. We have a library of cult horror films. That’s a big audience, it’s targetable, it’s niche driven, and there are advertisers who want to get to those audiences.

So, we think we can really leverage that. We’re still using the same thing that everybody is using, but we’ve got a couple of content edges that are going to give us the ability to get into specific niche groups of people to market to more effectively. So that’s the advertising bucket.

The second bucket, which I think we’ve got over any of the sites right now, is the ecommerce related to all of the movies on our site when our store goes live later this year. We’ll have all the VHS and DVDs of all the movies for our site because they’re real movies that have real VHSs and DVDs for them. And also we have all of the option stuff, [merchandise] related to those movies. We’ve got all the stuff for the mainstream independent film watcher and then on Make CinemaNow we have all the ecommerce related to that such as cameras, software, etc.

The third component is what I call Premium Services. Premium Services will involve the ability for certain premiere films that we’ll get both out of Trimark and other libraries and play them in their pay-per-view window. On the Make [CinemaNow] side, there are some subscribership models that we’re working on. And then there’s the Premium Services area on Make. We’ll be doing all of this marketing etc. for a maker that just has his home page, but wants to latch onto some other marketing initiatives that we’ve got. So say we go to X number of film festivals, do you want your films submitted in through us, do you want to have your film promoted on the e-zine that we have that goes to our horror film fans? Well you can do that and we’ll charge you (I’m making up the number now) $9.95 a month. I think a lot of people will want to do that because it will be an inexpensive way to latch onto stuff that we’re doing out of the Watch area so that Makers suddenly get the opportunity to go to a mainstream audience on a marketing level, but they’ll have to pay a little bit. Not thousands of dollars, but a little monthly fee to have that happen. I think that is going to be an interesting revenue generator.

[EB Insider is a free weekly email news source for next-generation entertainment. For more news and information please see http://www.ebinsider.com]